Abstract: The form of public foundational juridical person should be adopted in China to establish the eco-compensation fund (ECF) in order to realize the direct monetary subsidies to the act maintaining the ecosystem benefits. A multilayered system of ECF consists of industry-based eco-compensation fund, specific eco-compensation fund and general eco-compensation fund, which can be a local, regional or national level fund, ought to be built in the context of Ecological Compensation Ordinance. The internal structure of ECF includes institutions of administration, monitoring reviewing and auditing, and the functions of each need to be identified by Ecological Compensation Ordinance. A pluralistic system of financial sources of ECF should be created with the budgetary allocation as its fundamental fund source. The legal mechanism of ECF should also include systems of accounting, auditing, administrative and monitoring, which should be respectively specified by Ecological Compensation Ordinance.